Advertisement

Archive for Friday, February 3, 2012

Rate grab

A bill that would allow utilities to raise their rates before those rates are approved by the state is bad policy for Kansas.

February 3, 2012

Advertisement

Maybe it’s the mild winter that spurred natural gas utilities to take a shot at getting the Kansas Legislature to approve a bill to enable them to establish interim rates without going through an approval process.

Maybe they’re not meeting their revenue projections, what with January temperatures in the 60s instead of in single-digits.

The bill’s in the House committee on energy and utilities, where Monday it was thrashed by representatives of the Citizens’ Utility Ratepayer Board and AARP Kansas, who termed it totally opposite of the existing law in the state.

Utility representatives argued that the process for rate approval takes too long and is not responsive to utility needs, and thus discourages investment.

However the process proposed — enabling utilities to start charging higher rates and then make refunds if the new rates are not approved — is certain to hurt consumers, although it probably will drop some coin into the state’s coffers. Writes the budget director in a note attached to the bill: “…there could be an increase in revenues to the State General Fund if refunds are available and are not claimed by customers.”

Think people who move after paying rates that the CURB representative said are probably going to “be deemed unjust and unreasonable at a later date.”

If the utilities don’t like the regulatory process, a process that ensures them a level of profitability, then maybe they should determine with the Kansas Corporation Commission whether there is a means of shortening the review period. However, most individuals who get reviewed for raises on an annual basis, not whenever they want to propose a change, are unlikely to sympathize with the utilities. Try telling your boss you’re giving yourself a raise. And most businesses, who plan and operate on annual budgets, certainly would not appreciate a sudden change in utility rates any more than a utility would welcome a sudden, unbudgeted change in its costs.

Perhaps, in the end, the utilities are in the situation of the person who doesn’t want to work on Sundays: Hey, don’t become a Methodist minister. Some things just go with the territory. This proposed change is not in the best interests of the state’s residents.

Comments

Centerville 2 years, 9 months ago

The review period won't be shortened because the utilities (you) are taxed through your bill to pay the KCC directly for their related expenses, no matter how tangential.

This Idea won't go anywhere but it will keep you occupied while the wind power transmission line people start robbing us blind.

Commenting has been disabled for this item.